What audit committees need to know about PCAOB’s Form AP

The PCAOB’s new rule requiring auditors to disclose the name of the engagement partner and other firms participating in the audit has important implications for audit committees.

The Center for Audit Quality (CAQ), which is affiliated with the AICPA, recently published a tool that provides considerations for audit committees in their oversight of external auditors with respect to the new rule. The tool is available at the CAQ website (thecaq.org).

PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants, requires independent registered public accounting firms to file a Form AP with the PCAOB for each audit report issued. Each Form AP includes the engagement partner’s name and will be accessible in a searchable database on the PCAOB website.

The names of other accounting firms participating in the audit also are required to be disclosed on Form AP.

In light of the new rule, the CAQ guide suggests that audit committee members review the audit partner’s qualifications, industry experience, and other experience. Audit committee members also may want to understand whether the audit partner for their engagement also is the lead engagement partner on audits of other issuers.